Quick cut in corporate taxes to 25% pushed
The Joint Foreign Chambers of Commerce of the Philippines (JFC) wants the government to immediately slash the corporate income tax from 30 percent to 25 percent in the “Trabaho” bill, instead of reducing it in stages.
This is according to Florian Gottein, the executive director of the European Chamber of Commerce of the Philippines, who in a press briefing last week shared the JFC’s position on the Duterte administration’s second tax reform package.
The press briefing was held with other business groups who also had strong reservations about the “Trabaho” bill, specifically on how it would rationalize tax incentives but then increase their cost of doing business.
Called the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill, the package wants to cut the country’s corporate income tax (CIT) and change the tax incentives offered to export-oriented companies.
The country’s CIT remains one of the highest in Southeast Asia at 30 percent, an issue that the bill wants to fix by reducing it by 1 percent every other year for a span of almost a decade, until it reaches 20 percent.
This, however, is too slow for the JFC, which is comprised of various foreign business groups in the country, who collectively represent over 3,000 member companies.
“With regards to the CIT reduction, the JFC is pushing [to] reducing it from 30 percent to 25 percent upon enactment,” Gottein said.
The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers and Pamuri, the industry group for regional operating headquarters.
In the Trabaho bill, the CIT would have been reduced to 28 percent in 2021, the first year of CIT reduction, assuming the bill was passed in the 17th Congress.
